Dec. 19 (Bloomberg) — Ontario’s subsidies for clean-energy
producers that use local technology were ruled in breach of
World Trade Organization regulations, supporting complaints by
the European Union and Japan against Canada.
The province’s feed-in tariff, or FIT program, which pays
above-market rates to generators of renewable energy that use
Canadian-made equipment, undermines competition because it
favors domestic products, according to a WTO panel report posted
on the agency’s website today.
The federal government will appeal the decision, Kirby
Dier, a spokeswoman for the Ontario Ministry of Energy, wrote in
an e-mail. “Our position has always been that the FIT program
is consistent with Canada’s obligations under the WTO
agreements.”
The government’s Green Energy Act dictates that goods and
labor from Ontario must account for 60 percent of supply costs
at clean-power projects, depending on the type of renewable
source. It’s aimed at helping the province meet a goal to shut
all coal-fed generators by 2014 as it seeks to curb polluting
emissions.
The panel agreed with the EU and Japan that parts of the
program discriminate against foreign equipment suppliers, while
remaining divided on whether the subsidies are illegal.
‘Ignore Ruling’
“My advice to the next premier of Ontario would be to
ignore this ruling,” said John Bennett, executive director of
Sierra Club Canada, an environmental organization. “We have to
have the autonomy in our own country to develop technologies and
industries to be to the best advantage of our own economy.”
Japan said it’s concerned other countries may follow suit
and may appeal the illegal-subsidy issue.
“We want this to become a leading case so we can stop
protectionism from spreading,” said Jun Kazeki, an official in
charge of WTO issues at the Ministry of Economy, Trade and
Industry.
The WTO ruling will probably hinder the development of
renewable energy in Ontario and other jurisdictions that are
developing similar programs, Bennett said. The government now
has to determine what it can do to support and maintain momentum
in its renewables industry, he said.
To contact the reporter on this story:
Louise Downing in London at
ldowning4@bloomberg.net
To contact the editor responsible for this story:
Reed Landberg at
landberg@bloomberg.net
